The Reduction of Par or Stated Value of Stock by Issuance

question 142

Multiple Choice

The reduction of par or stated value of stock by issuance of a proportionate number of additional shares is termed a

• A) liquidating dividend
• B) stock split
• C) stock option
• D) preferred dividend

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Definitions:

Undertake

To commit oneself to and begin (an enterprise or responsibility); to take on.

APR

Annual Percentage Rate, the annual rate charged for borrowing or earned through an investment.

Compounded Daily

A method where interest is calculated and added to the account balance every day, leading to higher yields over time.

Loan

Borrowed money that is typically repaid with interest.